An Open Memo to My Boss
Subject: My Compensation
According to the media, we are living in desperate times, and desperate times, as they say, call for desperate measures. Take the Treasury Department's restriction on executive compensation to just $500,000 a year for banks that (reluctantly) receive federal bailout money. Call me a socialist (on second thought donít!), but I believe this could perhaps be extended to the private sector Ė to our very own company, even.
Now I know youíre thinking, "Norm, you talk a good talk, but are you prepared to walk a good walk? (In these shoes?) " And the answer is an emphatic, "Yes, I am!" I am prepared to make the supreme sacrifice here and now.
Specifically, I propose that effective immediately my compensation be adjusted to $499,999 per annum. Please note that this is well within the $500,000 cap imposed upon the banking industry, the very backbone of our economy (which reminds me, I need to book an appointment with my chiropractor, my back is killing me!).
I understand this means foregoing the deferred compensation package I have been receiving in the form of company backed collateralized debt obligations (please remind me again, exactly how do I cash these in?). I am also prepared to give up the executive perks that had been generously bestowed upon me including that all expenses paid trip to the companyís annual arm wrestling tournament in Indianapolis. Fortunately my team building skills are fairly well honed by now.
You are also probably thinking that following suit with the banking industry makes a great deal of sense, but how do I justify this rather substantial increase in my salary at a time when management has been charged with reducing expenses and headcount? The answer is simple: Ever wonder why the Yankees pay A-Rod $28 million a year when the Yankees fail to make the playoffs? Or why the head of Merrill Lynch pulled in a $15 million bonus last year while his firm went down the tubes and got bought out for a ridiculously low sum? This is what is called "pay for performance, not for results." Not only past and present performance, but potential future performance, weighted by probability and discounted for net present value. In other words, youíve got to look beyond the numbers. Downsizing and cost cutting are part of the problem, but they are not the solution.
Sure, you can pay me what Iím worth - and you know what? - thatís exactly what youíll get. Or you can pay me far more than what Iím worth, in which case, youíll get all that and then some. As any economist will tell you, you get what you pay for. If you want to hire the best people, you need to pay top dollar, and in all humility, I am the best people. So why arbitrarily limit compensation in the first place, you might ask? Good question for President Obama!
This is a classic case of viewing the glass as half empty as opposed to half full. Needless to say I am not in the glass half empty camp, and neither, I trust, are you. When I see a glass with a few drops of water or even with no water in it, I look beyond that to the water that could potentially inhabit the glass. I see not only a glass overflowing with water, I see a flood of water. Iím thinking, "Somebody grab a mop for Christ sake and clean up this mess!" A mess not in the negative sense, but a positive mess - a mess of abundance and happiness.
Thatís why during last summerís so called drought, I continued to water my lawn in full view, notwithstanding the dirty looks from some of my neighbors, knowing that the so-called drought was merely an opportunity to accommodate the deluge of rain that would inevitably follow.
The bottom line is that somebody has to step up to the plate and make the necessary sacrifices imposed by the government, so it might as well be me. I say, together, we can make a difference, and once again, please refresh my memory on the company-backed collateralized debt obligations.
A wise man once told me, "Norm, your opportunities are limited only by your imagination; your success is limited only by your enthusiasm; your upside is limited only by your desire, and for goodness sake, go out and buy yourself a decent set of cufflinks already." That wise man was you.
Thank you, and I look forward to your response, which I can only assume will be a positive one.